- BP’s profit rose to £2.4bn ($3.2bn), beating expectations
- Oil prices climbed above $100 amid war-driven supply fears
- Trading gains and volatility played a key role in earnings
British Petroleum's (BP) latest earnings have landed at a time when oil prices, war tensions and household energy costs are all moving in the same upward direction. The oil major reported profits of £2.4bn ($3.2bn) for the first quarter, more than double what it made a year earlier, as crude prices surged during the Iran conflict.
The timing of these results is likely to add to the discomfort. In the UK, gas and electricity bills are currently capped, with the typical annual dual-fuel bill set at £1,641 until June 30. However, with wholesale oil and gas prices rising since the Iran conflict began, the cap is now expected to increase by around £200 when it is revised in July. Energy firms are already subject to a windfall tax introduced in 2022 after profits surged during Russia’s invasion of Ukraine, but the levy applies only to profits from UK extraction. BP has said its UK operations account for less than 10 per cent of its global earnings, meaning most of its profits fall outside the scope of the tax.
So, what actually drove this sharp rise in profit? It wasn’t just one factor but a combination of price movements, trading gains and timing.
When oil prices rise, everything follows
At the centre of it all is the price of oil. Crude climbed from the mid-$60 range in February to above $100, briefly nearing $120 as the conflict escalated. That kind of jump tends to ripple across the entire energy system.
For BP, higher prices mean it earns more from every barrel it produces and sells. The company does not need to increase output significantly to see a boost in revenue, the price alone does much of the work.
There is also the question of supply concerns. War often creates uncertainty around production and transport routes. Buyers, including governments and large companies, move quickly to secure supply, sometimes paying a premium. That pressure feeds directly into company earnings.
Critics argue this dynamic exposes a deeper issue. Patrick Galey from Global Witness described the situation as “horrifying”, as quoted in a news report, pointing to the contrast between rising corporate profits and the broader economic strain on households.
The quieter engine: Trading and volatility
While oil production gets most of the attention, a large part of BP’s profit came from its trading arm. The company’s customers and products division reported profits of around £1.84bn ($2.5bn), a sharp rise from both the previous quarter and the same period last year.
This is where volatility becomes valuable. Rapid price swings create opportunities for traders to buy and sell at favourable margins. In stable markets, those opportunities are limited. In a crisis, they expand quickly.
Analysts had expected profits of around £1.97bn ($2.67bn), so the final figure came in higher than forecast. That suggests the scale of trading gains and the benefit of market conditions may have been underestimated.
At the same time, BP had entered the year on a weaker footing, with lower profits in earlier quarters. That makes the current jump appear even sharper, as the comparison base was relatively low.
A familiar pattern and a familiar backlash
There is a sense that this has happened before. During Russia’s invasion of Ukraine, energy companies also reported strong profits as fuel prices rose globally.
Campaign groups say the same cycle is repeating. Mike Childs from Friends of the Earth said fossil fuel firms are “quids in when global instability drastically inflates fuel prices,” reportedly said in response to the results. The End Fuel Poverty Coalition has called for a windfall tax, arguing households are again bearing the cost.
BP’s chief executive Meg O’Neill, who took over on April 1, said the company is focused on maintaining supply and stability, reportedly adding that teams are working to keep fuel moving and minimise disruption.
Investors, however, appear to be looking at the numbers differently. BP’s share price rose in early trading and has climbed significantly in recent months, reflecting expectations that higher oil prices could continue to support earnings.
What stands out is how quickly global events translate into corporate results. BP did not change its core operations overnight. Instead, it was already positioned to benefit from rising prices, existing infrastructure and an active trading business.
When oil prices rise sharply, that combination can turn instability into profit just as quickly. The question being raised now is less about how it happened and more about who ultimately pays the price.
